Three Fields of Labor

Labor Standard Law – The minimum requirements prescribed by existing laws, rules and regulations and
other issuances relating to wages, hours of work, cost of living allowances and other monetary and welfare
benefits, including those set by occupational safety and health hazards.
Labor Relations Law – Refers to the interactions between the employers and employees or their
representatives and the mechanism by which the employment standards are negotiated, adjusted and enforced.
Labor Legislation or Social or Welfare Legislation – Refers to a broader category of law that protects or
promotes the welfare of society or segments of it in furtherance of social justice.
Distinction: Labor standards Law is the material or substance of labor law; Labor Relations Law is the
mechanism or the processes on enforcing the substance.
Distinction between Labor Standards and Social Legislation: In LS, the employee is actually at work; In SL,
the employee is not at work or is unable to work.
Four Systems of Labor
1. Slavery – Refers to the extraction of work or services from any person by means of enticement,
violence, intimidation or threat, use of force or coercion, including deprivation of freedom, abuse of
authority or moral ascendancy, debt bondage or deception.
2. Serfdom – Enforced labor of serfs on the fields of the landowners, in return for protection and the right
to work on their leased fields.
3. Free Artisan – A free person who offers his services to others subject to nobody’s will
4. Wage System – A person offers his services to another under an employment contract for which such
service is paid by wages.
Social Justice
Garcia vs. PAL
The petitioners were entitled of their wages from the time the reinstatement order issued by the labor arbiter up
to the reversal of such decision. The reinstatement aspect is immediately executory even though the case is still
pending. The employer is obliged to reinstate the employee and pay for their wages and the employee is not
required to reimbursement for the wages he received if the decision is reversed. The law is obvious to make
reinstatement executory even upon pending appeal.
Capitol Medical Center vs Meris.
Since reinstatement is not possible, Meris is entitled for the back wages from the time he was dismissed until
the end of his contract or at the time of his retirement whichever may be the first to come and also he is entitled
for retirement benefits.
Employer-Employee Relationship
It is in personam, involves the rendition of personal service by the employee, and partakes of master and servant
relationship.
Four-fold Test
1. Selection and engagement of employees
2. Payment of wages
3. Power of dismissal
4. Power of control over employee’s conduct and over the means and methods by which the work is to be
accomplished
Two-tiered Test
(1) the putative employer’s power to control the employee with respect to the means and methods by which
the work is to be accomplished
(2) the underlying economic realities of the activity or relationship.
Manila Hotel Group vs NLRC
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power to dismiss; and
(4) the power to control employee’s conduct.
MHICL did not have and did not exercise any of the aforementioned powers. It did not select respondent Santos
as an employee for the Palace Hotel. He was referred to the Palace Hotel by his friend, Buenio. MHICL did not
engage respondent Santos to work. The terms of employment were negotiated and finalized through
correspondence between Santos, Mr. Schmidt and Mr. Henk, who were officers and representatives of the
Palace Hotel and not MHICL. Neither did Santos adduce any proof that MHICL had the power to control his
conduct. Finally, it was the Palace Hotel, through Mr. Schmidt and not MHICL that terminated respondent
Santos’ services.
Jo vs NLRC
The power of control refers to the existence of the power and not necessarily to the actual exercise thereof. It is
essential for the employer to actually supervise the performance of the duties of the employee; it is not enough
that the employer has the right to wield that power. Jo was indeed an employee and not the petitioners “partner
in trade”. Regardless of the way how Jo was paid in which he earns for every job done, it is not a ground that
there is no employer-employee relationship.
Republic of the Philippines vs Asia Pro Cooperative.
There is an employer-employee relationship between Stanfilco and Asia Pro because, first, Asia pro has
exclusive discretion in the selection of the team leaders that will be assigned in Stanfilco. Second, stipends and
shares are regarded as wages because they are given as compensation after rendering services. Third, the
respondent has the power to investigate, discipline and remove the team leaders of Stanfilco. And fourth, the
respondent has control over manner and means of performing services under the services contract with
Stanfilco.
Insular Life Insurance Co vs NLRC
 It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its
commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits.
None of these really invades the agent’s contractual prerogative to adopt his own selling methods or to sell
insurance at his own time and convenience, hence cannot justifiably be said to establish an employer-employee
relationship between him and the company.
Tongko vs Manufacturers’ Life Insurance company
There are built-in elements of control specific to an insurance agency, which do not amount to the elements of
control that characterize an employment relationship governed by the Labor Code.The Insurance Code provides
definite parameters in the way an agent negotiates for the sale of the companys insurance products, his
collection activities and his delivery of the insurance contract or policy. They do not reach the level of control
into the means and manner of doing an assigned task that invariably characterizes an employment relationship
as defined by labor law.
Manila Golf Country Club vs IAC
The petitioner has no way of compelling the presence of the caddies as they are not required to render a definite
number of hours of work on a single day. Even the group rotation of caddies is not absolute because a player is
at liberty to choose a caddy of his preference regardless of the caddy’s order in the rotation. It can happen that a
caddy who has rendered services to a player on one day may still find sufficient time to work elsewhere. Under
such circumstances, he may then leave the premises of petitioner and go to such other place of work that he
wishes. Or a caddy who is on call for a particular day may deliberately absent himself if he has more profitable
caddying, or another, engagement in some other place. These are things beyond petitioner’s control and for
which it imposes no direct sanctions on the caddies.
Jardin et al. vs NLRC
we ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other
under the boundary system is that of employer-employee and not of lessor-lessee. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The
management of the business is in the owner’s hands. The owner as holder of the certificate of public
convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules
promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages but get only that
in excess of the so-called “boundary” they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. We have applied by analogy the doctrine to the
relationships between bus owner/operator and bus conductor, auto-calesa owner/operator and driver, and
recently between taxi owners/operators and taxi drivers. Hence, petitioners are undoubtedly employees of
private respondent because as taxi drivers they perform activities which are usually necessary or desirable in the
usual business or trade of their employer.
R Transport Corporation vs Ejandra
R Transport invoked the Supreme Court’s opinions on the right of an employer to disregard an employee. By
following said opinions. R Transport impliedly admitted that it was the employer of Ejandra. The fact that
Ejandra was paid on committee footing did not govern out the presence of an employee-employer relationship.
UERMMMC vs The Honorable Undersecretary of Labor
Residency training clearly amounts to a pursuit of further education on a specific discipline. Thus, the
relationship between the teaching/training hospital and the resident doctor is not one of employer-employee
relationship. The training/teaching hospital may simply be likened to a medical school/university, but in this
instance, the emphasis is on practical application and training of its students, the resident doctors.
Calamba Medical Center vs NLRC
Under the ―control test, an employment relationship exists between a physician and a hospital if the hospital
controls both the means and the details of the process by which the physician is to accomplish his task. Where a
person who works for another does so more or less at his own pleasure and is not subject to definite hours or
conditions of work, and is compensated according to the result of his efforts and not the amount thereof,
the element of control is absent. As priory stated, the spouses-doctors maintained specific work-schedules, as
determined by petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight
hours each week and which were strictly to be observed under pain of administrative sanctions.
Tan vs Lagrama
Lagrama is an employee not an independent contractor. Evidence shows that the Lagrama performed his work
as painter and under the supervision and control of Tan. Lagrama worked in a designated work area inside the
theater of Tan for the use of which petitioner prescribed rules, which rules included the observance of
cleanliness and hygiene and prohibition against urinating in the work area and any other place other than rest
rooms and Tan's control over Lagrama's work extended not only the use of work area but also the result of
Lagrama;s work and the manner and means by which the work was to be accomplished Lagrama is not an
independent contractor because he did not enjoy independence and freedom from the control and supervision of
Tan and he was subjected to Tan's control over the means and methods by which his work is to be performed
and accomplished.
Sonza vs ABS-CBN
We find that ABS-CBN was not involved in the actual performance that produced the finished product of
SONZA’s work. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the
right to modify the program format and airtime schedule “for more effective programming.” ABS-CBN’s sole
concern was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise
control over the means and methods of performance of SONZA’s work. In any event, not all rules imposed by
the hiring party on the hired party indicate that the latter is an employee of the former. In this case, SONZA
failed to show that these rules controlled his performance. We find that these general rules are
merely guidelines towards the achievement of the mutually desired result, which are top-rating television and
radio programs that comply with standards of the industry.
Fulache et al. vs ABS-CBN
The petitioners are members of the appropriate bargaining unit because they are regular rank-and-file
employees and do not belong to any excluded categories. Specifically, nothing in the record shows that they are
supervisory or confidential employees; neither are they casual nor probationary employees, More importantly,
the labor arbiter’s decision, as a regular rank-and-file employees, they fall within the CBA coverage and are
entitled to its benefits.
EMPLOYER-EMPLOYEE VS. PRINCIPAL-CONTRACTOR
Carries a distinct and independent business and undertakes to perform the job, work, or service on its own
account and under its own responsibility, according to its own manner and method and free from the control and
direction of the principal in all matters connected with the performance of the work except as to the results
thereof.
PRINCIPAL-AGENT RELATIONSHIP
It is the principal who selects the agent. An agent is compensated under the contract of agency of services
rendered. He is disciplined by the principal as in the case of an employee because the agent is under the
authority of the principal. The principal controls the means and methods of the work of an agent. In this
relationship, there is only one party. The agent is merely an extension of the principal. They are regarded as
one. So if there is a contractor relationship, it is not among three parties but is between the principal/agent and
the other party.
Right to Hire
Zialcita et al. vs PAL
Article 136 provides, "Article 136. Stipulation against marriage. It shall be unlawful for an employer to require
as a condition of employment or continuation of employment that a woman employee shall not get married, or
to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by
reason of her marriage." Thus, stewardesses should remain single, such would be in violation of Article 136 of
the Labor Code.
PT&T vs NLRC
PT&T’s policy of not accepting or disqualifying from work any woman worker who contracts marriage is afoul
of the right against discrimination provided to all women workers by our labor laws and by our Constitution.
The record discloses clearly that de Guzman’s ties with PT&T were dissolved principally because of the
company’s policy that married women are not qualified for employment in the company, and not merely
because of her supposed acts of dishonesty.
Duncan Association of Detailman – PTGWO vs Glaxo Wellcome Philippines
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors, especially so that it and Astra are rival companies in the highly
competitive pharmaceutical industry. The prohibition against personal or marital relationships with employees
of competitor companies upon Glaxo’s employees is reasonable under the circumstances because relationships
of that nature might compromise the interests of the company. In laying down the assailed company policy,
Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its
secrets and procedures. That Glaxo possesses the right to protect its economic interests cannot be denied. No
less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its
right to reasonable returns on investments and to expansion and growth.
WAGES
Wages – Applies to the compensation for manual labor, skilled or unskilled, paid at stated times, and measured
by the day, week, month, or season.
Salary – Denotes a higher degree of employment or a superior grade of services, and implies a position or
office.
GAA vs CA
Wages indicates considerable pay for a lower and less responsible character of employment, while salary is
suggestive of a larger and more important service.
Fair Day’s Wage for a Fair Day’s Labor – A fair day’s wage for a fair day’s labor continues to govern the
relation between labor and capital and remains a basic factor in determining employees’ wages.
Equal Pay for Equal Work – This doctrine/legal truism means that persons who work with substantially equal
qualification, skill, effort & responsibility, under similar conditions should be paid similar salaries,
notwithstanding its international character.
ISAE vs Quisumbing
If an employer accords employee the same position and rank, the presumption is that these employees perform
equal work. If the employer pays one employee less than the rest, it is not for that employee to explain why he
receives less or why the others receive more. That would be adding insult to injury. The employer in this case
has failed to discharge this burden. There is no evidence here that foreign-hires perform 25% more efficiently or
effectively than the local-hires. Both groups have similar functions and responsibilities, which they perform
under similar working conditions.
FACILITIES AND SUPPLEMENTS
Facilities shall include articles or services for the benefit of the employee or his family but shall not include
tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of
the employer’s business.
Requisites:
1. Must be customarily furnished by the employer to the employees
Customary – is founded on long-established and constant practice connoting regularity.
2. Must be charged at a fair and reasonable value
3. The provision on deductible facilities must be voluntarily accepted by the employee in writing.
Supplement – Constitute extra remuneration or special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages.
Facilities vs Supplements
1. Facilities are part of the wage, supplements are independent of the wage
2. Facilities are deductible from wage, supplement are not deductible from wage
3. Facilities are necessary expenses for the laborer and his family existence, supplements are benefits or
privileges given above their ordinary earnings wages.
Atok Big Wedge Case
Facilities are items of expense necessary for the laborer’s and his family’s existence and subsistence so that by
express provision of law, they form part of the wage and when furnished by the employer are deductible
therefrom, since if they are not so furnished the laborer would spend and pay for them just the same.
Mabeza vs NLRC
The food and lodging, or the electricity and water consumed by the petitioner were not facilities but
supplements. A benefit or privilege granted to an employee for the convenience of the employer is not facility.
The criterion in making a distinction between the two not so much lies in the kind (food, lodging) but the
purpose. Considering therefore that hotel workers are required to work different shifts and are expected to be
available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel,
such as the private respondent’s hotel.”
Methods of Fixing Compensation
1. Time (daily and monthly paid workers – Once the agreed period of work is completed, the compensation
is earned and becomes due regardless of result. The standard forms of compensation based on time spent
are salaries or wages by the day, week, or monthly.
2. Commission
3. Job or task basis – A flat or fixed sum for each particular job or task completed, without regard to the
number of hours actually spent in the performance or completion.
4. Piece-rate basis (payment by result) – The value of the labor input for any particular stage is standard.
State Policies (at least three)
1. To rationalize the fixing of minimum wage
2. To promote productivity-improvement and gain-sharing measures to ensure a decent standard of living
for the workers and their family
3. To guarantee the rights of labor to its just share in the fruits of production
 4. To enhance employment generations in the countryside through industry dispersal
5. To allow business and industry reasonable returns on investment, expansion and growth
6. The state shall promote collective bargaining as the primary mode of setting wages and other terms and
conditions of employment; and whenever necessary, the minimum wage rates shall be adjusted in a fair
and equitable manner, considering existing regional disparities in the cost-of-living and other socio-
economic factors and the national economic and social development plans.
PROCEDURE ON MINIMUM WAGE FIXING
AGENCIES INVOLVE
National Wages and Productivity Commission [NWPC]
Compostion:
1. Ex-Officio Chairman (Secretary of DOLE)
2. Ex-Officio Vice-Chairman (Director-General of NEDA)
3. Two (2) members each from Worker and Employer sectors (Shall be appointed by the President of the
Phil upon recommendation of the Secretary of DOLE to be made on the basis of the list of nominees
submitted by the workers and employers sectors, respectively.
4. The Executive Director shall also be a member of the Commission
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARDS [RTWPB]
Composition:
1. Chairman (Regional Director of DOLE)
2. Vice-Chairmen (Regional Director of NEDA and Regional Director of DTI)
3. Two (2) members each from workers and employer’s sectors
4. Each Regional Board to be headed by its Chairman shall be assisted by a Secretariat
By virtue of Petition by Labor Union (An employer filed a petition to the
1. Proper board action – board may deny or approved (proper party: employer), if the petition conforms
with the requirements, the board shall conduct proper hearing.
2. Publication/notice hearing – notice of the petition and/or public hearing shall be published in a
newspaper of general circulation in the region and/or posted in public places as determined by the
Board. The notice shall include the name/s and address/es of the petitioner/s, the subject of the petition
and the date/s, place/s and time of the hearings. The publication or posting shall be made at least fifteen
(15) days before the date of initial hearing and shall be in accordance with the suggested form.
3. Opposition – Any party may file his opposition to the petition on or before the initial hearing, copy
furnished the petitioner/s.
4. Issuance of Wage Order – If after hearing, the RTWPB grants such petition takes effect 15 days after
publication.
5. Appeal to the NWPC - Must be made not later than 10 days from the date of publication of the WO.
Only on grounds of: (1) nonconformity with guidelines; (2) questions of law; (3) grave abuse of
discretion Does not suspend the effectivity of WO; unless bond equivalent to increase is posted
Unappealable
6. Petition for certiorari in the court of appeals (rule 65) – Not later than 60 days from notice of the
judgment, order or resolution
7. Appeal by certiorari in the supreme court under rule 45 – Within fifteen (15) days from notice of the
judgment or final order or resolution
Wage Distortion
Elements of wage distortion
1. An existing hierarchy of positions with corresponding salary rates.
2. A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate
of a higher one.
3. Elimination of the distinction between the two levels.
4. Existence of the distortion in the same region of the country.
Prubankers Association vs. Prudential Bank and Trust Company
“Distortion does not arise when a wage order gives the employees in one branch of a bank higher compensation
than that given to their counterparts in other regions occupying the same pay scale, who are not covered by the
said wage order. In short, the implementation of the wage orders in one region but not in others does not in
itself necessarily result in wage distortion.”
Bankard Employees Union – Workers Alliance Trade Unions vs. NLRC & Bankard
The court held that, in the first element there is no wage distortion because in fact the wages are classified by
levels and not by basis of their length of service.
It is true that seniority is a factor in determining the wages of the employees but for the purpose of the existence
of wage distortion, employees cannot create their own independent classification and use it as a basis. Also,
even if assuming there is a decreased in wage gap between the old, regular employee and newly hired
employees, that is not significant to be considered that there is actually wage distortion because the mere factual
existence of wage distortion does not, however, ipso facto result to an obligation to rectify it. It is the right of
the employer to increase its hiring rate, to establish minimum salaries, and adjust the rates of employees as
provided in Art. V sec. 2 of parties’ CBA.
Metrobank Employees Union vs NLRC, Metrobank
The court ruled that there is in fact a wage distortion. The definition of wage distortion, show that distortion can
so exist when, as a result of an increase in the prescribed wage rate, an elimination or severe contraction of
intentional quantitative differences in wages or salary rates” would occur “between and among employee
groups in an establishment as to effectively obliterate the logical bases of differentiation.” The law does not
require that there be a total abrogation of quantitative wage or salary differences, a severe contraction thereof is
enough. Accordingly, there was a contraction between personal groupings of 83% which is considered severe.
TMR
Methods of resolving wage distortion
The legislative intent is to encourage the parties to seek solution to the problem of wage distortions through
voluntary negotiation or arbitration, rather than strikes, lockouts, or other concerted activities of the employees
or management.
Ilaw at Buklod ng Manggagawa vs NLRC, San Miguel Corporation
The court ruled that it is true that workers shall have the right to engage in concerted activities for mutual
benefit and protection such as strike, but, under RA 6727, strikes is not provided as a solution in resolving wage
distortion. RA 6727 specifically provide a specific and detailed approach in resolving wage distortion through
collective bargaining.